This week the Minister for Communications, Ed Vaizey, backed Ofcom’s decision to step away from regulating net neutrality and leave the market to regulate itself.

Ofcom recently argued that the UK’s ISP market is considered effectively competitive and does not present any evidence of anti-competitive behaviour and should therefore not face restrictions on all forms of traffic management. We recently covered their claims in more detail in our opinion article (opinion.enta.net:Update: Net neutrality – is Ofcom too timid?).

Neil Watson, Head of Service Operations

It seems the Government agrees with Ofcom, with Mr Vaizey stating: “The internet has been responsible for an unprecedented level of innovation, which has led to multi-billion dollar companies being formed in just a couple of years.

This is a model that the British government wishes to protect. A lightly regulated internet is good for business, good for the economy, and good for people.

The government is no fan of regulation and we should only intervene when it is clearly necessary to deliver important benefits for consumers.”

It has been recently reported that net neutrality suffered a further blow when Ofcom announced its decision not to step in as regulator after receiving responses to its traffic management and net neutrality consultation. We would like to know what you think about Ofcom’s decision to stand back from enforcing net neutrality. Therefore, we have added a new poll asking for your feedback. Please also feel free to leave us a comment below.

It seems net neutrality, the principle of treating all Internet traffic equally in order to provide a fair and equal service for all users, suffered a further blow when Ofcom announced its decision not to step in as regulator after receiving responses to its traffic management and net neutrality consultation. The consultation was initiated to discuss Ofcom’s regulatory responsibilities and any future duties under the revised framework, along with a debate on why traffic management and net neutrality is important to both citizens and customers. The regulator’s reasoning behind its decision is that the UK’s ISP market is considered effectively competitive and does not present any evidence of anti-competitive behaviour and should therefore not face restrictions on all forms of traffic management. Worryingly, Ofcom has made this announcement despite the fact that BT and the TalkTalk Group freely admitted they’d favour any video or content providers that want to make a ‘deal’ in their Ofcom responses.

Speaking at a Westminster eForum on net neutrality, International director of Ofcom, Alex Blowers, said “Ofcom is committed to dealing swiftly with problems as they emerge, but we are also committed to approaching issues in such a way as not to assume a problem before a problem has emerged.” Surely with BT and Talk Talk blatantly stating their intent in their consultation responses it would not be hard to ‘assume’ that this will become a problem in the near future.

Earlier this month a discussion broke out in the industry in response to the publication of a report by David Graham from the Adam Smith Institute. Mr Graham’s report suggests universal broadband will lead to the abolishment of the BBC’s license fee and he argues that this will be a positive move as it will force the BBC to become more competitive.

Whilst I agree in theory that abolishing the license fee would force the BBC into providing a more competitive and therefore hopefully higher quality service, I struggle to believe that broadband will be the catalyst for this.

Firstly despite the promised, yet now delayed, 2Mbps USC the UK is still a long way off enjoying truly ‘universal’ broadband, especially at the speeds required to easily support IPTV services. Besides which even if UK residents had universal access to high speed broadband they would still (currently) be legally required to purchase a license if they intend to watch programmes as they are broadcast (e.g. streaming). Although, a license is not required for ‘on demand’ services (e.g. BBC iPlayer).

The last month has seen substantial media coverage of the latest row that has erupted between BT Retail and a number of content providers including the BBC. However, we think a fundamental issue is being missed. Instead of BT Retail focusing attention on the BBC et al to contribute to its increasing costs, it should instead be tackling its wholesale provider to reduce the price of bandwidth. Here I explain why this has a wider significance to ISPs and the industry as a whole.

June 2009 proved to be a turbulent month for two of the UK’s industry giants, BT and the BBC. The month began with reports that BT was throttling its option 1 customers’ connections to the BBC’s iPlayer service (and other bandwidth hungry services including YouTube) during peak times, reducing speeds to less than 1Mbps on the advertised up to 8Mbps service. This, according to the BBC, notably affected the iPlayer’s service quality.

The argument escalated when the BBC claimed that BT’s advertising of its option 1 package shied away from detailing this level of throttling. Instead it states that the package is capable of 25 hours of iPlayer streaming and only refers to the throttling in its FUP.

By mid June the plot thickened with a request from BT for content providers to pay towards the cost of delivering customers to their sites, claiming that the “free ride for content providers was over”.

“We can’t give the content providers a completely free ride and continue to give customers the [service] they want at the price they expect,” said John Petter, managing director of BT Retail’s consumer business.

As the popularity of bandwidth intensive applications such as iPlayer, YouTube and podcasts increase, have the ISPs that previously benefited so well from their dirt cheap broadband, unlimited broadband and even free laptop offerings punched too much above their weight?

Steve Lalonde, Chief Technical Officer

In the red corner…The ISPs!

For a long time now large, end user focused ISPs have invaded the market with extremely price-competitive offers that have undoubtedly brought down the average cost of broadband. A significant benefit to the end user you may argue and we agree. No-one denies this was a successful customer growth strategy but is it a sustainable business model?

Apparently not! As the likes of PlusNet complain that their average cost per user has tripled since the launch of the iPlayer and other leading ISPs approach the BBC for funding to off-set their increase in costs, Entanet asks what’s all the fuss about?